NEW DELHI: Shares of Tata Teleservices (Maharashtra) hit the upper circuit limit of 20 per cent in Friday’s trade after the Delhi High Court approved a $1.2 billion settlement between promoter Tata Sons and NTT DoCoMo.

The court rejected the RBI’s objection and allowed the arbitration award settlement. Following the development, shares of Tata Teleservices (Maharashtra) jumped 20 per cent to hit a high of Rs 8.3 on BSE.

The Reserve Bank of India (RBI) had in 2015 rejected Tata Sons’ proposal to pay a price, which is higher than the ‘fair value’ to buy out its Japanese partner’s stake in the telecom joint venture after the finance ministry told the central bank to ‘stick to the rules’, leaving the issue to be resolved through arbitration.

India’s central bank blocked the Tata Sons’ offer, saying foreign investors could not sell stakes in Indian companies at a pre-determined price.

Docomo approached a London tribunal in January 2015, which asked the Tata Group last June to pay $1.17 billion for not abiding by the agreement, ET reported earlier. Later Docomo then moved the Delhi High Court to enforce the award.

RBI was of view that the transfer of funds under mutual settlement violated provisions of the Foreign Exchange Management Act (FEMA), 1999 and was against public policy.

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“There will be a new brand identity — work has started on it,” a senior consultant working on the merged company’s new identity said, speaking on the condition of anonymity due to non-disclosure agreements.